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8308 - Resona Holdings Inc News Story

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Sector
Financials
Size
Large Cap
Market Cap £6.54bn
Enterprise Value £-84.31bn
Revenue £6.07bn
Position in Universe 147th / 3864

Japan lender Resona plans to cut branch costs by at least 20%

Mon 1st June, 2020 12:00pm
By Takashi Umekawa
    TOKYO, June 1 (Reuters) - Resona Holdings Inc  8308.T ,
Japan's fourth-largest bank, aims to reduce costs at its branch
network by at least 20%, its company president said, adding that
not all big branches would remain in the same form.
    Japanese lenders, which have long struggled with an
ultra-low interest rate environment that has depressed earnings,
now also have to grapple with a likely rise in bad loans due to
the coronavirus pandemic.
    President Masahiro Minami said the reduction in branch costs
would take place over the "medium-term". He declined to disclose
how much the 20% cost reduction would equate to in value terms.
    "One way to reduce costs is downsizing. All branches don't
have to provide full banking services and there is no need to
remain the same," he said in a interview in May that was
embargoed until Monday.
    Presentation materials provided by the bank showed Resona
plans to keep its large number of branches at roughly 800.
    Resona, which is mainly focused on the domestic market, has
some 830 branches nationwide. By comparison, Mitsubishi UFJ
Financial Group Inc's  8306.T  has 470 branches and Sumitomo
Mitsui Financial Group Inc  8316.T  has 440 and Mizuho Financial
Group Inc  8411.T  has 460.
    While Resona has seen downloads for the bank's smartphone
app climb to 2.2 million as of end-March, more than double
figures from a year earlier, Minami said face-to-face
consultations remain important for big banking decisions.
    "People just click and buy things from Amazon but they don't
do that when it comes to financial products such as a home
loan," he said.
    Resona has forecast net profit will slide 21% to 120 billion
yen ($1.1 billion) in the year to end-March, factoring in some
50 billion yen in provisions for bad loans. The expected profit
decline is, however, less steep than some of its rivals with
SMFG expecting a 43% drop and Mizuho forecasting a 29% fall.
($1 = 107.81 yen)

 (Reporting by Takashi Umekawa; Editing by Edwina Gibbs)
 ((Takashi.Umekawa@thomsonreuters.com;))
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